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Inside this issue
Cost of Federal Rules on Dealerships Hurts Economy, Says NADA Chairman
Competition Expected to Restrain Store Profits
Record U.S. Sales With Sustained Profit Sets Trend
GM Dealers: Recalls Put Bonus at Risk
Auto Lender Will Pay $5.5 Million to Settle FTC Charges It Harassed Consumers, Collected Amounts They Did Not Owe
Bouncing Back in 'A Different World' of Car Sales
Dallas Couple Buys 50,000th Nissan Leaf in the U.S.
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Cost of Federal Rules on Dealerships Hurts Economy, Says NADA Chairman

In an interview with WWJ Newsradio 950 in Detroit last week, NADA Chairman Forrest McConnell said federal government regulations on new-car dealerships hurt the economy and reduce jobs. According to a new study conducted by Center for Automotive Research in Ann Arbor, Mich., new-car dealerships spent $3.2 billion in 2012 to comply with 61 major federal rules, which resulted in higher prices for dealership customers. Click here to listen to the interview.
Source: WWJ Newsradio 950 (Detroit)

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Competition Expected to Restrain Store Profits

Dealership new-vehicle profits won't grow anytime soon, predicts Steven Szakaly, chief economist at the National Automobile Dealers Association. "There is intense competition among the OEMs and just as intense competition among the dealers," Szakaly told Automotive News during a discussion about NADA Data 2014, the association's annual report on the state of the industry. "For profits on new vehicles to go up, one of those two fundamentals has to change," he said, "and I don't see that changing."
Source: Automotive News
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Record U.S. Sales With Sustained Profit Sets Trend

A half-decade after the near-death of American automaking, the Detroit Three have reached an unprecedented milestone: They're boosting sales while remaining consistently profitable. May U.S. auto-sales numbers, released tomorrow, are projected to show Americans are continuing to buy more cars. Vehicle deliveries in the U.S. may have risen 6.5 percent to 1.54 million, the average of estimates compiled by Bloomberg. Adjusting for seasonal trends, automakers are on pace to sell 16.1 million vehicles this year, according to the estimates. General Motors Co., Ford Motor Co. and Chrysler Group LLC are reaping the benefits after restructuring to shed brands, shut unneeded factories and gain greater flexibility in labor contracts.
Source: Bloomberg
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GM Dealers: Recalls Put Bonus at Risk

Retailers fear customer satisfaction will drop

Some General Motors dealers worry that an onslaught of safety recalls could jeopardize their quarterly incentive bonuses. GM told dealers in recent weeks to stop delivering several high-volume models that later were recalled to fix safety defects. It's difficult to close a sale when customers are unable to take delivery right away or even test drive the vehicles, dealers say. Just a handful of delayed or lost sales can cost dealers tens of thousands of dollars in factory incentives if the retailers fall short of their sales targets.
Source: Automotive News

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Auto Lender Will Pay $5.5 Million to Settle FTC Charges It Harassed Consumers, Collected Amounts They Did Not Owe

A national subprime auto lender will pay more than $5.5 million to settle Federal Trade Commission charges that the company used illegal tactics to service and collect consumers’ loans, including collecting money consumers did not owe, harassing consumers and third parties, and disclosing debts to friends, family and employers. Consumer Portfolio Services, Inc. (CPS), headquartered in Irvine, Calif., agreed to refund or adjust 128,000 consumers’ accounts more than $3.5 million and forebear collections on an additional 35,000 accounts to settle charges the company violated the FTC Act. CPS will pay another $2 million in civil penalties to settle FTC charges that the company violated the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA)’s Furnisher Rule.
Source: FTC

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Bouncing Back in 'A Different World' of Car Sales

Florida dealer George Nahas, the 2002 Time Quality Dealer Award winner, lost two General Motors franchises: Oldsmobile in 2004 and Saturn five years later. In October 2011, he bought a Chevrolet store in Wildwood, northwest of Orlando and 23 miles west of his former Saturn dealership. Now, Nahas is enjoying some stability. George Nahas Chevrolet is located in the sweet spot of central Florida's burgeoning growth. Nahas, the current treasurer of the National Automobile Dealers Association, is running for the vice chairman's post. He also owns Montgomery (Ala.) Subaru, but he leaves a general manager to run it while he stays at the Florida store. Nahas, who is in his mid-60s, spoke with Staff Reporter Richard Truett. Click here for the interview.
Source: Automotive News
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Dallas Couple Buys 50,000th Nissan Leaf in the U.S.

A Dallas couple recently got more attention than they had likely expected when they bought a 2014 Nissan Leaf. The electric sedan, purchased from AutoNation Nissan of Lewisville, happened to be the 50,000th Leaf sold in the U.S. Introduced in the U.S.in December 2010, the Leaf is an electric car powered by lithium-ion batteries and has a base price of less than $30,000. The Dallas and Houston areas are among 10 markets for a new Nissan promotion that provides two years of no-cost public charging to Leaf buyers. “Texas is a great indicator that the right mix of customer awareness and strategically placed charging can lead to rapid EV adoption, and we expect to use that model to grow our sales in markets across the U.S.,” said Toby Perry, director of EV marketing for Nissan. With nearly 115,000 sales globally since its launch, the Leaf is the world's top-selling electric vehicle, Nissan says.
Source: The Dallas Morning News
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Quotable

"There is intense competition among the OEMs and just as intense competition among the dealers. For profits on new vehicles to go up, one of those two fundamentals has to change."

--- Steven Szakaly, NADA chief economist, commenting on his prediction that new-vehicle profits will remain flat, Automotive News, June 2 

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